Taking Up Insurance

Life insurance gives you and your family financial protection against death, permanent disability and critical illnesses. The following area some common insurance plans:

WHOLE LIFE PLANS
- you get lifelong protection as long as premiums are paid
- most whole life plans build up cash values which can be withdrawn in the form of a policy loan in case of an emergency
- "riders" to cover for illnesses and total permanent disability can be added to the basic plan

ENDOWMENT PLANS
- aimed at building up your savings over a fixed policy term
- the policy pays the sum assured and any bonuses you have built up at the end of the policy term, or when you die or become totally and premanently disabled during a policy term
- depending on your needs, an endowment policy can serve as an all-purpose savings plan, a children's education savings plan or a retirement plan

TERM INSURANCE
- you get protection for a fixed period
- it pays the sum assured only if you die or become totally and permanently disabled during this period
- has no surrender value when the policy ends or terminates prematurely
- however, the cost of this type of coverage is usually lower than that of a whole life plan
- usually comes in terms of 5 to 40 years and is renewable when each term ends

INVESTMENT-LINKED INSURANCE PLANS (ILP)
- invest in different investment instruments while providing you with optional insurance coverage that you can vary according to your needs

That was the easy part. The more important question now is how much coverage do we need?

To have a rough estimate of how much coverage is enough, fill up the above table accordingly.